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Case-by-case privatization

One of the main goals of the Agency is to launch and manage a case- by-case privatization process in the Republic of Belarus.

With the support of the World Bank, the Agency is implementing a pilot privatisation project which includes the following stages:

Stage 1. Selection of companies

The careful selection of candidate companies for privatization is of great importance and shall take into consideration all possible economic, social and political risks.The Agency is collaborating with the State Property Committee, the Ministry of Economy and the World Bank in process of selecting companies for a case- by-case privatization according to the criteria specially designed for this Project especially: annual sales starting from 30 million US dollars, profitability of companies, the amount of short- and long-term obligations should be less than 50% of the total assets, the number of employees should not exceed 3 thousand persons etc.

Approval of the list of privatisation objects in relation to which the Agency performs the functions of privatisation bodies is carried out on the basis of the resolution of the Council of Ministers of the Republic of Belarus approved by the President of the Republic of Belarus.

Stage 2. Involvement of Financial Advisors

A core component of the project includes the involvement of Financial Advisors (internationally reputable investment banks or advisory firms) to assist Agency to execute the privatization transactions, including all preparatory work, structuring the sale, implementing the actual sale and performing appropriate post-sale activities for the privatization of the State Owned Enterprises (SOEs).

The process of selecting Financial Advisors consists of the following stages:

  • Drawing up and publishing an invitation to submit EOIs;
  • Consideration of the EOIs submitted and drawing up a short-list of potential advisors by the Evaluation Committee consisting of the representatives of the Agency as well as of the Ministry of Economy, Ministry of Finance, and State Property Committee;
  • Drawing up and submitting the potential advisors included in the short-list an invitation to submit request for proposals, including the invitation letter with the date of the contest indicated; instruction for consultants; terms of reference and a draft contract;
  • Submission of offers by advisors, final evaluation of the offers, selection of the winner;
  • Signing the contract.

Stage 3. Preparation of joint-stock companies carried out by the Agency jointly with Financial Advisors

  • Financial Advisors carry out an operational, financial, and legal analysis of companies and collection of the documents required for the procedure of a complete due diligence at the transaction stage;
  • Recommendations of the measures aimed at increasing attractiveness of companies are developed;
  • Companies are evaluated pursuant to the Belarusian legislation and following the internationally accepted methods;
  • The market interest to a company, including drawing up the list of potential strategic investors, is evaluated;
  • Financial documents of the company are drawn up pursuant to the international financial reporting standards;
  • A strategy to attract an investor is developed.

Stage 4. Interest analysis

  • Drawing up and circulation of an information memorandum;
  • Informing potential strategic investors;
  • Inspection of strategic compatibility of the investors which have expressed their interest;
  • Access of potential investors to the information about companies required to carry out the procedure of complete inspection;
  • Analysis and evaluation of the investment offers of potential investors, holding negotiations.

Stage 5. Making a privatisation deal

  • Signing a contract with the investor;
  • Payment for the privatisation object.